The Manufacturer Magazine : Promoting best practice in Manufacturing

B3 Cable Solutions, New connections

Manufacturing in Action, Source : The Manufacturer
Zone : Leadership and strategy
Published : March 2008

The meteoric growth of communications technologies presents a rich vein of opportunity for B3 Cable Solutions. Steve Ellis, managing director, talked to Jayne Flannery as the company gears up to strengthen its growing international footprint

For Steve Ellis, managing director of B3 Cable Solutions, there is no market more fascinating than that which provides people with the means to communicate. Fibre optic and metallic cables form the core of intranet, internet and most other communications networks. They are also the backbone behind transport communications links and the means by which heat and light are transmitted.

What excites Ellis is the pace of change and limitless scope for new applications. “We now have a vast array of internet enabled technologies, but new ones are being added all the time. Globally there is a constant hunger for more capacity, and that is what our products can provide,” he stated.

Cable manufacture began at the company’s Manchester headquarters more than a century ago. Today, B3 is the only high volume telecommunications cable manufacturer remaining in the UK and Ireland. The business is growing extremely rapidly and is poised to acquire a new international focus.

Last year, B3 expanded into Ireland through the acquisition of another cable manufacturer at Longford, in southern Ireland. Like Manchester, the Longford business processes telecom cable products, but also caters for energy suppliers and so gave an immediate foothold in another growing segment of the cable market.

B3 has no intention of stopping there. It is now close to concluding due diligence to take on two further businesses in India and northern Spain. In India, it will be acquiring the optical and fibre cable manufacturing business of UM Cables from Usha Martin ltd.

“India will give us access to the fast-growing, emerging markets in Asia and a new optical fibre processing capability which is something we don’t currently have. We are able to supply these products, but only through a partnership arrangement. An internal optical fibre capability will enable us to take advantage of the rapid deployment of that technology in some markets,” he explained.

India will also provide a low cost manufacturing option for some products, although Ellis was more cautious about this benefit. “We have to be careful. The cost of distribution and logistics can easily neutralise the savings on labour,” he said.

In Spain, B3 is simultaneously purchasing the telecommunications and railway signaling cable business of Nexans, based in Santander. “The new base in northern Spain will give us a stronger market presence in continental Europe. Also, the business we are acquiring is at the cutting-edge of the technologies and processes behind the latest high bandwidth copper cable. They have a lot to teach us and this knowledge will accelerate the growth of other parts of our business,” he added.

Ultimately though, knowledge transfer will be a two-way process. He believes that both acquisitions will benefit from the numerous lean initiatives that have been implemented at Manchester over the last 10 years. “Many of our competitors have the advantage of being sited in low cost base economies. Only a relentless approach to driving cost out of our production processes enables us to remain commercially attractive,” he stated.

Kaizen is the chosen framework for continuous improvement and it has transformed the efficiency of the Manchester facility. “As we take on these new businesses, we will apply a very focused version of what we have learned there,” he explained. “We expect that this approach will enable us to make fairly immediate improvements to their performance. The lessons learned at Manchester have already been applied to our business in Ireland and we will export the same thinking to India and Spain.”

Ellis was keen to point out that geographic expansion through acquisition is only one facet of B3's growth. “We can also demonstrate very strong organic growth,” he continued. “At the end of 2005 our turnover was £80 million. Last year, it stood at £145 million. Of course the increase was partly driven by the acquisition of Longford, but approximately £30 million of that can be attributed directly to organic growth in the business.”

In a market driven by innovation, investment in R&D has always been a priority. He can point to a number of new product areas which are driving organic growth such as the Triple Play series, which meets consumer requirements for ever higher bandwidths. Standard telephone lines are a thing of the past in most homes. They are supplemented by the internet and new services such as TV on demand. This expanding range of services demands higher performing cable and he sees no limit to the demand for upgrades.

“The UK market is fairly well-developed, but new services are becoming available all the time and we provide the medium by which they can be accessed. There is great potential too in countries such as India. There is a low level of broadband uptake at the moment, but that situation will obviously change as the economy grows,” he commented.

B3 has also just completed a project with Dublin Airfield Authority on a new low voltage cable product that supports runway lighting. He has no doubt it will be of interest to other airport authorities as they expand.

Then there is the energy side of the business, which came with the acquisition of Longford. “At present we are a supplier nationally within both the UK and Ireland, but we are only a partial supplier. We don’t yet have a full offering of energy products, and that is another opportunity,” he said.

He looks to the future with optimism. “We expect to see continued growth in our existing core business because globally there is an insatiable demand for more capacity. Further acquisitions are also likely to either boost our manufacturing capability, or to enhance our market presence in a specific area. However, we intend to be sensible about it and will only proceed where there is a clear opportunity to add value to what we have achieved already,” he concluded.

Comments on this story

click here to add a comment

Related Content